Mitch 's Blog

If you are like me, you are sick and tired of working your butt off to help your buyers who insist on buying a short sale.  You and I both know that 65% of these offers never come through for our buyers yet when one falls apart, they are quite willing to try to get the next great deal!

Below is something that my Agents give all our customers.  It has helped us tremendously.  I am also going to write another post in a minute that will also give you tools to help your customers understand that they are setting theselves up for disappointment in most cases.  Also, I know there are a few of you out there that are very successful with short sales.  Personally, I would never list a property without a deliverable price.  Just think, you market your properties and spend money on your listings only to bring a full price offer and have it rejected by the bank.  I would rather help people buy or sell their homes that have control of their homes.  I guess that's just my personal feelings!

Are you sure you want to buy a short sale home?

 Well the short sale market is in session and there are a lot of buyers getting very frustrated. It seems no matter what I say; people are still listening to the media telling them to buy foreclosures or short sales.

My goal is not to tell you to avoid short sales like the plague, but to make sure you understand the negatives to the short sale.

First, based on last month sales, short sales are only about 3%-5% lower than regular sales. They are not really much of a bargain. Basically they are selling at market rate. Based on the amount of time involved and the frustration, that savings can quickly be lost.

So why am I so down on Short Sales? The biggest issue is that they are an unknown. I will point a few of the issues below:

1. In most cases, the soonest you will hear if your offer was accepted is 45 days or more.

2. The listing price has nothing to do with the actual price that the bank will accept. The bank does not give Realtors a deliverable price at the time of the listing.  The Bank will not give out a price until they have received offers.  (Many Agents are using short sales as a means to capture buyers.  They list the homes at a price that there is no way the bank will accept the offer, but the listing agent captures many emails and phone calls about that very low priced home.  Ethical?  I don't think so!)

3. Many buyers are offering the bank much lower than the listed price. The reality is, the bank will be selling that home at very close to market rate. They will do an appraisal on the property prior to accepting any offer.

4. While you are waiting for an answer on your offer, the listing remains active and the bank is usually receiving multiple offers.  (This is against MLS rules but since most Real Estate Boards around the country are not sure what to do with short sales, they simply let this rule slide.  According to our MLS Rules, they are supposed to be marked contingent while the sale is contingent on bank approval.)

5. When the bank finally does come back with an answer, there usually is no chance for a counter offer; they usually accept the best offer. (That is if any are acceptable at all)

6. The bank will usually turn down most offers that are asking them to pay anything toward closing costs.

7. The bank will usually not do any repairs on the property...they are mostly "as is" contracts.  Many of these homes may need a substantial amount of work.

8. The bank still may require the seller to sign a promissory note to pay the difference. So after all this time and potentially at the closing table, the seller may walk away from the deal.   At that point you are right where right back to the beginning of your home search.

9.  Based on my office stats, less than 35% of our Short Sale offers are approved by the bank.  Many of our offers are at full or over the listed price.   

Have you ever wondered how some people in this business seem to get ALL the business while most of the Realtors are struggling to get by?  Have you ever wanted to be one of the 20% that actually earn a great living even when the market is slow? 

As with most everything, only 20% of the Agents out there to 80% of the business.  Real Estate is no difference.  In fact, it may be as low as 10% of the Agents are doing 90% of the business, but I think I'll stay with my 20% comment!

I did a test about two years ago with both myself and my agents.  Keep in mind, at the time I was averaging about 14-16 hour days 6 days a week.  Sunday's is my wife's day since I am a workaholic.  I pased an hourly day planner to all of my Agents and for 7 days we all agreed to keep track of our hours and what we did, not only per hour, but broken down by the minutes.  We all documented our complete work day for 7 days.  What we found out was very scary, sad, enlightening and possibly one of the most important discoveries for our entire office.  We found out we don't really work as much as we think we do.  In fact, we work about half as much as we thought we did. 

Ok,  so this really bugged the heck out of me as I was feeling like quite the slacker.  After all, I preach work ethic all the time to my Agents and here I am as guilty as all of my Agents.  The reality was, all of us were at about 50% and some were even worse.  We learned that we spend way to much time being busy with not enough time actually getting business done.  My suggestion to you is to try this.  If you are not getting the results you desire, take a week and write down eveything you do during your work hours.  If you normally work 8 hours, fill in the minutes or 10 hours, fill in the blanks.  It really doesn't matter how many hours you think you work, you will find out, most likely, that you are not working as hard as you think you are!

My average of 15 hour days turned out to be right around 8 hours.  In other words, I wasted 6-8 hours per day.  Leanring this changed my work day and work week.  I realized that I could get the same amount of work done in less hours if I spent my work hours....working!  I immediately went to work changing my ways as did many of my Agents.  Some of my Agents managed to stay on track and they have excelled in their business.  Others were on track for a bit and then went back to their old ways. Because of what I learned, along with a couple of life changing experiences, I now accomplish more in a week working just 10 hour days 5 or 6 days per week.  Just as important, I actually have a life!  What a concept.  Ok now those of you who know me well know that I am spending a lot more hours working right now to launch my two new companies.  Once that happens, I will go back to my 50 - 60 hour productive work week!

So what am I trying to teach you here today?  Why am I trying to get you to do this anyway?  It's really because I care about your success.  One of my biggest fullfillments in my life is the ability to help others succeed.  It really is what drives me on a day to day basis...not to mention that it's wicked fun!  Can you tell I'm from Boston with that statement?  The reality is, if you can't get control of your hours then how can you get control of your productivity.  If you truly work 50 hours a week in this business, you can be successful.  Work ethic, true work ethic, not being busy work ethic, goes so far in accomplishing your goals.  If you look in the mirror and can say you work 10 hours per day 5 or 6 days per week, then you should be seeing the fruits of your labor.  You have it in you to be one of the top 20%.  What's the difference between the top 20% and the rest of the 80%?  Work ethic.  They put the time in that it takes to be successful in this business.  You can too!  Next time I'll talk about time management which will help you become better at....managing your time! 

So I have been generating my own leads for the past 6 years or so with very good success.  It's been a couple of years since I have looked for a lead generation company to try.  As I start my eHomes Realty Network company in a few weeks, I am looking to find out if anyone has found a lead generation company they like. 

I tried house.com recently.  They had promised me that each of the 10 leads I was getting, at $50 per lead, had been confirmed that they are looking to buy or sell a home.  I figured that my average sale with leads costs me $250 so it sounded good to me.  I gave it a try.  After all, I was only going to waste $500 if it didn't work.  Well let me tell you what happened!

I put two of my best lead conversion Agents on the test group.  First, we were supposed to receive at least 3 or 4 leads in the first 3 or 4 days.  And of course they wanted their cash up front.  I didn't get a lead for almost 3 weeks and that was only because I called, complained and threatened to cancel.  That's when the fun started.  Out of the 10 leads we got, we were able to get hold of 8.  Yes, the phone numbers would good numbers.  However, there wasn't one of the 8 that had any interest in buying or selling their home.  I had my Agent ask them why they told the House.com representative that they were interested in buying or selling.  We asked this of 5 of the 8 we got hold of.  All 5 said that they never told anyone from House.com that they were interested in buying or selling a home.  Only one of them remembered them even calling and then they just verified that they were a real person.  Great verifited leads but it gets worse from here.

After I had my data together, I called to talk to the VP of sales who was the one who sold me the program.  Actually they gave me a deal because they wanted $75 per lead!  I was informed by the customer service person that I was not allowed to talk to the guy.  I was confused of course and the customer service rep started getting mad at me when I started pushing him about talking to the guy that sold me.  Since I wasn't allowed to talk to the VP, I asked the guy I had on the phone how they verified my leads.  He told me that they only find out if its a real number and that's it.  They don't verify the leads are interested in buying or selling...in fact, I'm not sure how they even capture the leads. 

After this happened I tried to call the President of House.com because I had met him at the FAR conference earlier that year.  To make a very long story short.  For the next three weeks I continued to call and email me both the VP and the President.  Finally I left a message with the President letting him know that I would be the one with the big SCAM sign in front of his booth at the NAR show.  Remarkably he finally answered me and refunded my money. 

That's only one of my horror stories with lead generation companies.  With all that mouthful said, I'm looking to find a few companies I can recommend for my members. If you have used a Lead Generation Company in the past or presently that you are getting great results from, please take a moment to email me or post here and tell me your story.

Thanks for your help!

When I started in this business I had a horrible experience almost from day one.  I had a customer that had called the listing agent on a house and told them he was working with me.  My customer, who I hadn't educated because I had no idea about that, fell for everything the other Agent said.  Things like, don't worry about Mitch, we will take care of him!  You know he did!  Yeah right!  I lost a $7500 commission to, from what I was told later, one of the sleaziest in our business.  I went home the day I found out and had decided to quit this business.  This was not my style at all and I had no desire to be in an industry where lack of ethics was running rampant. After all, I had many job offers in the Internet world from which I came, for a lot of money.  I told my future wife the story and that I had decided to take a job and she said something to me that has stayed with me since and is the reason I do this business and take it so personally.  She said, "for every person you don't help, they have the chance of being screwed by someone else". 

I sat back and thought about that statement for quite some time and realized she was 100% right.  I think it's one of the reasons I married her!

Over the next several years I have been challenged many times with having to deal with Agents that don't do the right thing.  I joined the Board of Directors in my area to hopefully make a difference.  Unfortunately after 3 years it is quite obvious that I won't be able to make a difference in our community with regard to ethics.  I can though, make a complete difference with my Agents that work in my brokerage.  All my Agents know that if they do anything remotely unethical they will be fired immediately.  The same rule goes for my Mortgage Company too.  In fact, I fired my top producer a couple of weeks ago as she crossed the line.  To me there is no room on the other side of the line.  If you cross it, you are gone. 

I have talked to other Brokers about this in the past and they seem to only care about the revenue that Agent brings into their office.  It blows my mind that someone would jeopardize their integrity over a buck. I just don't get it.  How do you expect to haved quality Agents work for you if you don't care about their ethics?  I call these your one hit wonder Realtors and Brokers. They will get customers, but never will they have customers for life.  In the end, they will be gone from the business.  However, there will be another horrible Realtor following right behind them. 

So how do you know if you are doing the right thing or the wrong thing.  I have taught my Agents a very simple, easy to use process if you are not sure.  Here it is...If you think you may be crossing the line for something, then the chances are, you are crossing the line.  Yes, it's that simple.  If you have to question if something is ethical then most likely it isn't!

That brings me to my mirror method.  I have been doing this since I was around 21 years old and it works great.  I call it the Mirror to My Success!

I know this might sound very weird but it has helped me to be successful my entire working life.  I learned many years ago that it is impossible to lie to yourself while looking in the mirror.  Almost every day I will spend some time in front of my mirror at home.  It's usually at night after working all day.  I always ask myself similar questions.  Did I do a good job today?  Did I help my customers?  Was I 100% honest with total integrity?  The key to this is looking in your eyes.  It is very easy to rationalize to yourself if you are not looking into your eyes.  I search deep into my eyes to get my answers.  Since adapting this way of life years ago, I don't steal, I don't cheat, I don't lie, I work hard, I am honest, I care about people, I am a good hard working person.  You too can get the benefits  by also using this method. It is amazing.  I have turned many people on to this self-help philosophy and they have all had similar results.  They perform better at work, have better relationships, and have a better general feeling about life.

Keep in mind, you have to live with yourself.  Some people obviously don't have a problem crossing the line while they smile to your face.  It's not my style and hopefully it's not your style either.  At some point in your life you will have to face what you have done today.  In the end, you will be out of business as word spreads about your ethics and then all of the sudden, you are alone.  You will have joined the thousands of Realtors who thought they could cheat their way to success. 

Keep a smile on your face, be honest, work hard, really care about your customer, and do the RIGHT thing and you will have a long prosperous rewarding career!

I have spent the last couple of years trying to change the attitude of both my Agents, and the Agents in the brokerages that I have consulted.  One of the biggest mistakes I see so many Agents make, is not looking at themselves as a business.  This is a major mistake for anyone who takes their Business serious and is looking to get to the next level.

One thing I did when I first got in the business was to write a plan.  I wasn't really sure what I was going to do or how I was going to do it, but I did write a plan to follow.  While I wrote my plan I needed to include a couple of things.  Firstly, I had to know how the Real Estate numbers worked.  I had to understand transactions and how the number of transactions would directly relate to the revenue I deposited in my account.  Once I understood the numbers, I had to figure out how I was going to reach my goal of 24 transactions my first year.  There were only two things that I knew for sure.  I loved playing golf and I was excellent on the phone.  With that understanding, I decided that my marketing plan would consist of doing as much floor time as possible and play as much golf as possible.  It worked out great because I looked at myself as a business, not just as a Realtor.  My first year I ended up selling 36 homes with 28 from floor calls and 8 from people I met at the golf course. 

Each year, before Jan 1, I spend whatever amount of time it takes to create my goals both quarterly and yearly.  Not only do I write my goals, I write my action plan to reach my goal.   When I was selling Real Estate, I would figure out exactly how many homes I needed to close to ensure I always had at least $10,000 in commissions coming in.  Each year I would take what I had learned from the prior year, both good and bad, and apply them to the following year.  Each year I grew!

The purpose of this blog is to help you change your perception of who you are today and who you will be in the future.  If you take this business serious, then you need to start looking at yourself as a business.  Here are a few things you should be doing always:

1.  Write your goals down - At the beginning of the year (you can do this today for the rest of the year if you haven't already) you should write down your monthly, quarterly, six month and yearly goals.  Once you do this, you will know excactly how many transactions you need to close to reach those goals.  I would take it a step further and break it down to how many customers I needed to show in a month, and then a week, to ensure hitting or exceeding my goals.  This must be in writing and you must hold yourself accoutable in reaching those goals.

2.  Develop a budget -  If you plan on growing your business, you are going to need to spend money.  Unless you are truly lucky, you will never reach your true potential as a Realtor/Business Owner without spending any money.  You should have a budget for your marketing, your business supplies, and basically all your expenses.  You need to know how much and where you are going to spend your  money before you start your year.  If you don't know your numbers, you can't possibly grow your business properly.

3.  Marketing Plan -   As with any business, proper marketing will help you reach your goals.  With that said, make sure you do your homework on how you spend your money.  If you are like most Agents, your funds are limited.  You want to make sure you are getting the most bang for your buck.  To me of course is by using the Internet and I will get into that in a minute.  Regardless of what you choose for your marketing plan, you must committ to it.  Most marketing does not start paying dividends for 4-6 months, even longer depending upon what you are doing.  As you are making your plan, figure out the amount of dollars you are willing to spend per transaction.  For instance, I always took 20% of my revenue and put that into marketing.  I would also recommend deciding what segment of the market you plan on going after and sticking to it  I'm not a big believer in scattered marketing.  If you are going to go after listings, be the best at it.  If you are going to work with buyers, be the best at it.  If you are going to do foreclosures, you get it..be the best at it. 

4.  Internet Program - These days the Internet is one of the easiest, cost effective means of starting in the Real Estate business.  If you do not have an Internet program, you are most likely not maximizing your business...especially in this slower market.  As most of you know, all my Agents work through my sites and we generate all their leads through the Internet.  Most of the Agents that I have helped around the country had one thing in common.  They were all pretty new to the business and they didn't have a large, if any, circle of influence to start their career.  If you don't have a large circle of influence, you have an opportunity to generate a tremendous amount of business through your website.  The best part about the Internet to me, is it puts you immediately on an even playing field with even the biggest Realtors in  your area.  With all this said, be sure you know what you are doing.  The Internet for all its potential glory can suck all your money out of you like a vampire who hasn't seen a human for a month!  If you have questions about Internet marketing, don't hesitate to get with me.  Believe me, I wasted a ton of money before I was able to convert my years of Internet experience prior to Real Estate into a functional Internet program that created revenue on a constant basis. 

Hopefully you will see the importance of becoming a business, not just a Realtor.  It's all about planning, setting goals, education, and more education.  The more you can learn prior to actually spending money, the better.  By planning your business, it will help you be the best at whichever segment of the market you will work on.  You can't just say your the best in your marketing, you need to strive to be the best.  After a couple of years of building your business, you will start to realize you are working mostly on referrals.  This is the time to start thinking about building your team.  This is one of the easiest businesses you can grow with minimal money.  However, if you don't treat this as a business, you will always be one of those 80% who wonder how the 20% keep going strong even in this market. 

As always, if you need any help or have any questions, don't hesitate to call or email me.  Good luck!